When Treasury Secretary Henry Paulson was chairman of Goldman Sachs, he went into the foreign stock exchange business with Bernie Madoff even though he knew Bernie was a crook.

6/19/01 Guardian UK:

"City briefing: Backers for EuroNasdaq"

Nasdaq-Europe, the pan-European stock market controlled by the US Nasdaq stock market, yesterday said that eight banks and brokers had taken stakes in the company.

The eight are US market maker Bernard L Madoff, French bank BNP Paribas, Swiss bank Credit Suisse, Belgian-Dutch financial house Fortis, and three Wall Street investment banks - Goldman Sachs, Lehman Brothers and Schroder Salomon Smith Barney, and Spain's Santander Central Hispano Investment.

12/22/08 Telegraph UK:

"Bernard Madoff 'fraud': Increased scrutiny in hedge fund industry"

More than a decade ago bankers from Goldman Sachs' asset management division were despatched to Bernard Madoff Investment Securities to discover how the legendary fund manager maintained such consistently good returns.

The American banking giant prided itself on managing funds in-house but if it could get a better deal for its clients at Madoff, Goldman would gracefully admit it and allocate some funds.

One former Goldman partner said: "I remember the guys came back baffled. Madoff refused to let them do any due diligence on the funds and when they asked about the firm's investment strategy they couldn't understand it. Goldman not only black-listed Madoff in the asset management division but banned the brokering side from trading with the firm too."

Information about Bernie Madoff's business between 2001 and last month is hard to come by. I tried three different search facilities and zippo. I did find one recent article about NASDAQ US taking a stake in an ailing NASDAQ Europe.

But NASDAQ Europe wasn't the only joint venture between Bernard L. Madoff Investment Securities, and Goldman Sachs.

12/10/99 Wall Street Journal:

"Nasdaq Agrees to Adopt Auction System To Trade Its Shares and NYSE Issues"

...The NASD announced an agreement in principle to adopt the trading system being developed by Primex Trading NA LLC.

When an order is entered in Primex, participants compete for it by trying to better the best bid or offer then prevailing in the country. This "auction" process is the heart of the Big Board, but there, only floor brokers and specialists compete in the auction. Primex promises to allow any participant in the country to compete.

Primex "will provide one additional valuable . . . . means to produce price improvement between bid and offer," said Rick Ketchum, president of the NASD.

Primex is the brainchild of Bernard and Peter Madoff, the brothers who run Bernard L. Madoff Investment Securities, a so-called third-market firm whose primary business is competing with the NYSE and regional exchanges for orders in Big Board stocks.

But its other backers include the exchange's four largest member firms: Merrill Lynch & Co., Morgan Stanley Dean Witter & Co., Goldman Sachs Group Inc. and Citigroup Inc.'s Salomon Smith Barney unit....

Oddly enough, a well known financial search engine returned a number of current Madoff scandal stories with the date 9/14/08. That is the day Ben Bernanke announced the Federal Reserve had downgraded the quality of collateral it would accept for various financial transactions.

Did someone or some institution pledge an investment in Bernard L. Madoff Investment Securities as collateral and the Fed got burned big time? 

Forget Bernie's trading strategy. Anyone with access to basic financial data would have known Bernie Madoff wasn't buying and selling more than $20 billion of treasury bills every month. Transactions of that size are too big to go unnoticed and they are easily verified. 

Why Henry Paulson kept his mouth shut about Bernie Madoff's scam is another good question.  

Read about Enrica Cotellessa Pitz, long time Bernard L. Madoff Investment Securities Inc. controller, in Bloomberg News, the Wall Street Journal or the New York Times?

Enrica Pitz is listed as Bernie's controller in Plunkett's 2006 Investments & Securities Industries Almanac so everyone on Wall Street knows who she is.

Pitz's tribute to Sister Marguerite Torre published in the New York Daily News in September 2007  goes a long way to explaining why Pitz has been able to keep her name out of the news.

Sister Marguerite Torre was the principal at  the Blessed Virgin Mary Elementary School in Ozone Park, Queens.

More importantly, Sister Marguerite is Joe Torre's sister. Joe Torre, of course, was the long time manager of the New York Yankees and is now coach of the Los Angeles Dodgers.

Ozone Park is probably best known as the home of John Gott's social club. It is just north of Howard Beach where I think Frank Dipascali was originally from.

There is a lot more to the Bernie Madoff scandal but if you're not rich and influential, you probably won't hear about it.  If you have a 401(k), think long and hard about how Wall Street keeps secrets.